A lesson for America in Va.'s Northop win

By
washingtonpost.com editors

By Gary Poehlein
Alexandria

"Northrop to relocate to N. Va.” [news story, April 27] is typical of how businesses move or start up in the United States. State and local governments compete aggressively for organizations that will bring jobs and boost the local economic base. Offers often include tax breaks, land deals, infrastructure improvements and even cash.

Unfortunately, the federal government does not seem to be nearly as aggressive in the international competition for jobs. High corporate taxes and the expectation that employers must provide health insurance make us less competitive in the global marketplace. How long will it take us to realize that a reduction of business costs, compensated for by higher individual taxes, will be in the best interest of this country?

State and local governments are locked in an internecene battle, tripping over themselves to entice businesses to relocate. The tax breaks are obscene. Certainly the prospect of additional jobs is attractive. But are these businesses often don't pay for their impact on infrastructure (roads, schools, etc?).

When tax breaks expire, what keeps these same businesses from trying to extract more concessions--from local and state governments as well as employees--to stay? After all, other states will extend attractive breaks to attract them!

Lost in this equation are the huge social and financial costs when a business departs. These include unemployment costs, tax losses, impact on housing values, boost in number of uninsured, etc. All these costs are dumped on the community.